FDIC Chairperson Expresses Her Concern About Steps To Mitigage Foreclosure Related Crisis
It was while the top fiscal regulators were discussing over the ways and means to be employed to stabilize City Group, FDIC’s Chairperson, S.C. Bair, expressed her concern about steps to mitigate foreclosure-triggered crisis. Her support to the City Group was absolutely certain provided the bank aided and supported her in return. Her cause was to reduce foreclosures and the bank finally submitted to her demand. The conference was a rarity as most of the debates pivoted around helping citizens avoid foreclosure but ended without a resolution.
As a definite step towards curbing foreclosures, Bair had suggested the use of money collected from the taxpayers. This did not go well with the government and the resulting displeasure led to the formation of measures and strategies that have proved unable to stem the rapid rise in foreclosures. Over ten million people will be victims of foreclosure in another five years time.
Mrs. Blair’s fight to prevent foreclosure is seen as an effort to advertise herself, by the White House and the Treasury. This, they feel is aimed at projecting them as unfeeling persons towards the plight of the millions suffering from foreclosure. She is now precluded from most of the meetings regarding foreclosures.
As part of a rescue programme, Mrs. Blair, put into action certain measures, to help about 65000 house owners. These were people who were two months behind with their dues. Though not all, but nearly 7200 people have benefited so far. So too Congress proceeded to help the people and ended up with problems. Till now only 200 owners have applied for relief and there has been no modification of loans.
There are families with ailing members who could easily pay up only if the rate if interest was a trifle low. They fail to understand why there is no help for them when banks are being aided. Bair in her attempt to help the people had estimated a total of 24 billion dollars that would be required. The Treasury observed that it would take at least 70 billion dollars for the purpose and that the F.D.I.C. has not looked into the possibility of defaulters once the rates are reduced.
Severe criticism has bee leveled at the FDIC and the Congress for their plans seem to be overlooking the loss that the economy will, incur. They are also wary about who the genuine loaners at risk are. There are those who become defaulters willingly in order to claim a modification.
